The Federal Reserve’s system, which allows financial institutions to send money back and forth electronically, collapsed on Wednesday morning.
The “operational error,” as the Fed described it, has affected a number of services, including its main automated clearing house system, which connects depository and affiliated institutions that send electronic credit and debt transfers.
There are no initial indications that there is a suspicion of a foul.
Along with the Fed ACH service, other affected systems include Check 21
A central bank statement said the problem became known around 11:15 a.m. ET. A man from a Wall Street bank said the Fedwire and ACH systems appear to be back online around 2:45 p.m. ET.
“Our technical teams have determined that the cause is an operational error by the Federal Reserve. We will provide updates through the status of the service when more information becomes available,” the Fed said.
The statement also noted that the problem had affected payment deadlines and said that the Federal Reserve “would inform efforts to resolve problems to our customers when available.”
No additional information.
The list of affected services: Accounting Services, Central Bank, Check 21, Check Adjustments, FedACH, FedCash, FedLine Advantage, FedLine Command, FedLine Direct, FedLine Web, Fedwire Funds, Fedwire Securities, National Settlement.
The crash happened the same week. Fed Chairman Jerome Powell spoke to Capitol Hill lawmakers about the central bank’s progress on its consumer-oriented payment system and efforts to develop a “digital dollar.”
Powell said it would be an “important year” for the program’s development.
“This will be a year in which we will engage with the public quite actively,” the central bank leader said during a hearing in a parliamentary committee.
The Federal Reserve has been developing a digital payment system for several years that would, among other things, help ensure greater access to payment systems for non-residents.
Powell did not provide details, but noted that the Fed may need official permission to continue its plans.
“We may need legislative permission for such a thing,” he said.
Interruptions, especially with the ACH system, can have a wide impact. The system processes direct wage deposits, social security and income tax refunds, as well as automatic payments for mortgages and utility bills.
FedCash has been distributing currency and coins that have been in short supply since the Covid-19 pandemic. FedWire is a settlement service, while FedLine provides alternative services to the ACH system.